EXHIBIT 10.59
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made this 1st day of
May, 1998 by and between POSITRON CORPORATION, a Texas corporation with
principal offices located at 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxx 00000
("SELLER") and IMATRON INC., a New Jersey corporation with principal offices
located at 000 Xxxxxx Xxxxx Xxxx., Xx. Xxx Xxxxxxxxx, XX 00000 ("BUYER").
WHEREAS, Seller wishes to issue and sell to Buyer certain shares of its
common stock ("Shares") in exchange for certain consideration; and
WHEREAS, Buyer wishes to purchase such certain shares of common stock
issued by and from Seller pursuant to certain terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements, the Seller and Buyer hereby agree as follows:
AGREEMENT
1. Sale and Purchase of Shares. On the closing date as set forth in
Section 3 ("Closing Date"), Seller shall deliver to Buyer, for the consideration
set forth in Section 2 hereof, the greater of Nine Million (9,000,000) shares of
Seller's common stock or whatever number of common shares in excess of 9,000,000
common shares constitutes fifty-one percent (51%) of Seller's outstanding voting
securities on a fully diluted basis, exclusive of out of the money warrants,
and/or options, and/or convertible securities, calculated as of the Closing
Date. For this purpose, "out of the money" shall mean warrants and/or options
and /or convertible securities in which the purchase price of the underlying
common stock for which the warrant or the option may be exercised or the
security converted exceeds the fair market value of the underlying common stock
by more than 10%, as determined by averaging the bid and asked prices of the
common stock during the last ten (10) trading days immediately prior to the
Closing Date.
2. Consideration. In consideration of the purchase of the Shares on the
Closing Date, Buyer hereby agrees to pay the following consideration:
(a) The affirmative covenants of Buyer as described in Section 10
herein.
(b) Payment of One Hundred U.S. Dollars ($100.00), payable at Closing.
3. Closing. The closing of the sale to, and purchase by, Buyer of the
Shares shall take place at the offices of Imatron Inc. at the hour of 10:00
a.m., on the first business day after all conditions precedent shall have been
met or waived, or on such other day or at such other time or place as the Seller
and Buyer shall agree.
At the Closing, Seller will deliver to Buyer certificates representing
the Shares being purchased by Buyer, registered in its name.
4. Restriction on Transfer of Securities.
4.1. Restrictions. The Shares are transferable only pursuant to (a) a
public offering registered under the Securities Act of 1933, as amended (the
"Securities Act"), (b) Rule 144 (or any similar rule then in effect) adopted
under the Securities Act, if such rule is available, and (c) subject to the
conditions elsewhere specified in this Section 4, any other legally available
means of transfer.
4.2. Each certificate representing Shares will be endorsed with the
following legend:
(a) Legend
"The securities evidenced hereby may not be
transferred without (i) the opinion of counsel satisfactory to
the Company that such transfer may be lawfully made without
registration under the Securities Act of 1933 and all
applicable state securities laws or (ii) such registration."
(b) Stop Transfer Order. A stop transfer order shall be placed with the
Seller's transfer agent preventing transfer of any of the securities referred to
in paragraph (a) above pending compliance with the conditions set forth in any
such legend.
4.3. Removal of Legend. Any legend endorsed on a certificate or
instrument evidencing a security pursuant to Section 4.2 hereof shall be
removed, and Seller shall issue a certificate or instrument without such legend
to the holder of such security, (a) in accordance with Section 4.2(a) hereof,
(b) if such security is being disposed of pursuant to registration under the
Securities Act and any applicable state acts or pursuant to Rule 144 or any
similar rule then in effect, or (c) if such holder provides Seller with an
opinion of counsel satisfactory to it to the effect that a sale, transfer,
assignment, offer, pledge or distribution for value of such security may be made
without registration and that such legend is not required to satisfy the
applicable exemption from registration.
5. Representations and Warranties by Seller. Except as disclosed and
described in Schedule 5 hereto, Seller represents and warrants to Buyer that:
5.1. Organization, Standing, Power. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas, and has the requisite corporate power and authority to own its properties
and to carry on its business in all material respects as it is now being
conducted. Seller has, or at the Closing Date will have, the requisite corporate
power and authority to issue the Common Shares, and to otherwise perform its
obligations under this Agreement. The copies of the Articles of Incorporation
and Bylaws of the Company delivered to Buyer or its agents prior to the
execution of this Agreement are true and complete copies of the duly and legally
adopted Articles of Incorporation and Bylaws of Seller in effect as of the date
of this Agreement.
5.2. Qualification. Seller is duly qualified or licensed as a foreign
corporation in good standing in each jurisdiction wherein the nature of its
activities or of its properties owned or leased makes such qualification or
licensing necessary and failure to be so qualified or licensed would have a
material adverse impact on its business.
5.3. Financial Statements. Attached hereto as Exhibit A are: (a) a
balance sheet at September 30, 1997, together with the related statements of
operations and cash flow, and changes to shareholders' equity for the 9 month
period then ended, and (b) a draft of a balance sheet at December 31, 1997 (the
"Balance Sheet Date"), and the related statements of operations and cash flow
for the quarter then ended, prepared by Seller. Such financial statements (i)
are true and correct and in accordance with the books and records of Seller,
(ii) present fairly the financial condition of Seller at the balance sheet dates
and the results of its operations for the periods therein specified, and (iii)
have, in all material respects, been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior
accounting periods, except that the balance sheet at December 31, 1997 and
related statements of operations and cash flow is in draft form and does not
contain footnotes. Specifically, but not by way of limitation, the balance
sheets or notes thereto disclose all of the debts, liabilities and obligations
of any nature (whether absolute, accrued or contingent and whether due or to
become due) of Seller at December 31, 1997 and at the Balance Sheet Date which,
individually or in the aggregate, are material and which in accordance with
generally accepted accounting principles would be required to be disclosed in
such balance sheets, and the omission of which would, in the aggregate, have a
material adverse impact on Seller. The balance sheets include appropriate
reserves for all taxes and other liabilities accrued at such date but not yet
payable.
5.4. Tax Returns and Audits. Except as disclosed and described on
Schedule 5.4 hereto, all required federal, state and local tax returns or
appropriate extension requests of Seller have been filed, and all federal, state
and local taxes required to be paid with respect to such returns have been paid
or due provision for the payment thereof has been made. Except as disclosed and
described on Schedule 5.4, Seller is not delinquent in the payment of any such
tax or in the payment of any assessment or governmental charge, Seller has not
received notice of any tax deficiency proposed or assessed against it, and
Seller has not executed any waiver of any statute of limitations on the
assessment or collection of any tax. None of Seller's tax returns has been
audited by governmental authorities in a manner to bring such audits to the
Seller's attention. Seller does not have any tax liabilities except those
reflected in Schedule 5.4 hereto and those incurred in the ordinary course of
business since the Balance Sheet Date.
5.5. Litigation; Governmental Proceedings. Except as disclosed and
described on Schedule 5.5 hereto: there are no legal actions, suits,
arbitrations or other legal, administrative or governmental proceedings or
investigations pending or, to the knowledge of Seller, threatened against
Seller, its properties, assets or business; Seller is not aware of any facts
which are likely to result in or form the basis for any such action, suit or
other proceeding; Seller is not in default with respect to any judgment, order
or decree of any court or any governmental agency or instrumentality; Seller has
not been threatened with any action or proceeding under any business or zoning
ordinance, law or regulation.
5.6. Compliance with Applicable Laws and Other Instruments. The
business and operations of Seller have been and are being conducted in
accordance with all applicable laws, rules and regulations of all governmental
authorities. Subject to shareholder approval of appropriate amendments to the
Articles of Incorporation as contemplated by this Agreement, and except with
respect to existing registration rights of holders of certain securities issued
by Seller, as disclosed and described on Schedule 5.6, neither the execution nor
delivery of, nor the performance of or compliance with, this Agreement nor the
consummation of the transactions contemplated hereby will conflict with, or,
with or without the giving of notice or passage of time, result in any breach
of, or constitute a default under, or result in the imposition of any lien or
encumbrance upon any asset or property of Seller pursuant to, any applicable
law, administrative regulation or judgment, order or decree of any court or
governmental body, any agreement or other instrument to which Seller is a party
or by which it or any of its properties, assets or rights is bound or affected,
and will not violate the Articles of Incorporation or Bylaws of Seller. Seller
is not in violation of its Articles of Incorporation or its Bylaws.
5.7. Common Shares. The Common Shares, when issued and paid for
pursuant to the terms of this Agreement, will be duly authorized, validly issued
and outstanding, fully paid, nonassessable and free and clear of all pledges,
liens, encumbrances and restrictions. The Common Shares, when issued, will
contain no undisclosed interest, present or future, and Seller does not know,
and at Closing will not know, of any assertion of such an interest. The Common
Shares will be genuine, and Seller has no knowledge of any fact which would
impair the validity thereof.
5.8. Capital Stock. The currently authorized capital stock of Seller is
as follows:
SECURITY AUTHORIZED ISSUED COMMON SHARE EQUIVALENT RESERVED
Common 15,000,000 5,128,990 5,128,990
Series A Preferred 5,450,000 1,595,005 1,614,705
Series B Preferred 35,000 25,000 632,721
All of the outstanding shares of capital stock of Seller have been duly
authorized and validly issued and are fully paid and nonassessable. Except as
disclosed and described in Schedule 5.8, neither the offer nor the issuance or
sale of the Common Shares as contemplated by this Agreement constitutes an
event, under any anti-dilution provisions of any securities issued or issuable
by Seller or any agreements with respect to the issuance of securities by
Seller, which will either increase the number of shares issuable pursuant to
such provisions or decrease the consideration per share to be received by Seller
pursuant to such provisions. All outstanding securities of Seller have been
issued in full compliance with an exemption or exemptions from the registration
and prospectus delivery requirements of the Securities Act and from the
registration and qualification requirements of all applicable state securities
laws. Seller is not a party or subject to any agreement or understanding, and to
Seller's knowledge, there is no agreement or understanding between any persons
or entities or by a director of Seller, which affects or relates to the voting
or giving of written consents with respect to any security of Seller.
5.9. Warrants, Options, Exchange Rights and Conversion Rights. Except
as otherwise disclosed and described in Schedule 5.9 hereto or as contemplated
by this Agreement, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, calls, contracts, demands, commitments,
Convertible Securities (as hereinafter defined) or other agreements or
arrangements of any character or nature whatever, under which Seller is or may
be obligated to issue capital stock or other securities of any kind representing
an ownership interest or contingent ownership interest in Seller. Except as
otherwise disclosed and described in Schedule 5.9 hereto or as contemplated by
this Agreement, there are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of Seller.
5.10. No Brokers or Finders. No person, firm or corporation has or will
have, as a result of any act or omission of Seller, any right, interest or valid
claim against or upon the Seller or Buyer for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, in connection
with the transactions contemplated by this Agreement. Seller will indemnify and
hold Buyer harmless against any and all liability with respect to any such
commission, fee or other compensation which may be payable or determined to be
payable in connection with the transactions contemplated by this Agreement.
5.11. Composition of the Board of Directors. As of the Execution Date,
the complete Board of Directors of Seller consists of those persons, including
vacant positions, as set forth on Schedule 5.11.
6. Representations and Warranties of Buyer. Buyer represents and
warrants that:
6.1. Investment Intent. The Common Shares being acquired hereunder are
being purchased for Buyer's own account and not with the view to, or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act. Buyer understands that the Common Shares have not
been registered under the Securities Act or any applicable state laws by reason
of their issuance or contemplated issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act and such
laws, and that the reliance of Seller and others upon this exemption is
predicated in part upon this representation and warranty. Buyer further
understands that the Common Shares may not be transferred or resold without (a)
registration under the Securities Act and any applicable state securities laws,
or (b) an exemption from the requirements of the Securities Act and applicable
state securities laws.
6.2. Accredited Investor. The state in which Buyer's principal office
is located is set forth in Buyer's address as set forth in this Agreement. Buyer
qualifies as an accredited investor within the meaning of Rule 501 under the
Securities Act. Buyer has such knowledge and experience in financial and
business matters that Buyer is capable of evaluating the merits and risks of the
investment to be made hereunder by Buyer.
6.3. Acts and Proceedings. This Agreement has been duly authorized by
all necessary action on the part of Buyer, has been duly executed and delivered
by Buyer, and is a valid and binding agreement upon the part of Buyer.
6.4. No Brokers or Finders. No person, firm or corporation has or will
have, as a result of any act or omission by Buyer, any right, interest or valid
claim against Seller for any commission, fee or other compensation as a finder
or broker, or in any similar capacity, in connection with the transactions
contemplated by this Agreement. Buyer will indemnify and hold Seller harmless
against any and all liability with respect to any such commission, fee or other
compensation which may be payable or determined to be payable as a result of the
actions of Buyer in connection with the transactions contemplated by this
Agreement.
7. Conditions of Buyer's Obligation. Buyer's obligation to purchase and
pay for the Common Shares on the Closing Date is subject to the fulfillment
prior to or on the Closing Date of the conditions set forth below. In the event
that any such condition is not satisfied to Buyer's satisfaction, then Buyer
shall not be obligated to proceed with the purchase of such Common Shares nor
otherwise with any further of its obligations pursuant to this Agreement.
7.1. No Errors. etc. The representations and warranties of Seller under
this Agreement shall be true in all material respects as of the Closing Date
with the same effect as though made on and as of the Closing Date.
7.2. Compliance with Agreement. Seller shall have performed and
complied in all material respects with all agreements or conditions required by
this Agreement to be performed and complied with by it prior to or as of the
Closing Date.
7.3. Qualification Under State Securities Laws. All registrations,
qualifications, permits and approvals required under applicable state securities
laws for the lawful execution and delivery of this Agreement and the offer,
sale, issuance and delivery of the Common Shares shall have been obtained.
7.4. Proceedings and Documents. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be satisfactory in form and substance
to Buyer and its counsel.
7.5. Resignation of Officers and Appointment of Chief Executive
Officer. Seller will obtain and deliver to Buyer the resignations of each of the
officers of Seller, including but not limited to its chief executive officer,
effective as of the Closing Date, and simultaneously therewith shall cause the
appointment of a chief executive officer and such other officers as are
designated by Buyer. Seller acknowledges that the officers' resignations
pursuant to this Section 7.5 will not constitute resignation by any such
employee from employment by Seller, unless specifically so indicated, and
further that such resignation pursuant to this Section 7.5 will not be deemed a
breach of any employment agreement which might be in effect between Seller and
such employee. Seller further acknowledges that delivery and acceptance of such
resignation does not otherwise modify the terms of any employment agreement
which may be in effect, nor is it intended to effect Seller's ability to
negotiate mutually acceptable changes in future to any employment agreement
which may be currently in effect.
7.6. Special Shareholders' Meeting. Promptly following execution of
this Agreement, Seller shall take, with the assistance of Buyer as set forth in
this Agreement, all such actions as may be necessary and shall cause the
convening of a Special Meeting of Shareholders as promptly as possible to amend
the Articles of Incorporation to authorize an increase in its authorized common
stock in such an amount as to fully effectuate the provisions of this Agreement,
taking into account such obligations as Seller may currently have or may be
expected to have in the foreseeable future in light of its business plan. It is
the reasonable expectation of the parties that the appropriate number of
authorized shares resulting from such amendment will be not less than
100,000,000 common shares.
7.7. Board Resignations. (a) Upon request of Buyer at any time between
execution of this Agreement and the Closing Date, to be effective upon the
Closing Date, Seller will obtain and deliver to Buyer the resignations of at
least three of the four members of its Board of Directors, as reflected on
Schedule 5.11 to this Agreement. (b) Immediately upon Closing, Seller will cause
a sufficient number of directors' resignations to be effective and thereupon
will cause the nominees of Buyer to be elected as directors of Seller in place
of the resigned directors or otherwise to fill vacancies on the Board, so that,
following such action, the nominees of Buyer will constitute a majority of the
members of the Board then in office.
8. Conditions of Seller's Obligation. Seller's obligation to sell the
Common Shares to Buyer on the Closing Date is subject to the fulfillment prior
to or on the Closing Date of the conditions set forth below. In the event that
any such condition is not satisfied, Seller shall not be obligated to proceed
with the sale of such Common Shares.
8.1. Shareholder Authorization. The shareholders shall have authorized
an increase in the number of authorized shares of common stock sufficient to
fully effectuate the purposes of this Agreement.
8.2. No Errors, etc. The representations and warranties of Buyer under
this Agreement shall be true in all material respects as of the Closing Date
with the same effect as though made on and as of the Closing Date.
8.3. Compliance with Conditions. Buyer shall have performed and
complied with all agreements or conditions required by this Agreement to be
performed and complied with by it prior to or as of the Closing Date.
9. Seller Affirmative Covenants. Seller covenants and agrees that:
9.1. Corporate Existence. Seller will maintain and cause each
Subsidiary (as hereinafter defined) to maintain its corporate existence in good
standing and comply with all applicable laws and regulations of the United
States or of any state or states thereof or of any political subdivision thereof
and of any governmental authority where failure to so comply would have a
material adverse impact on Seller or its business or operations.
9.2. Books of Account and Reserves. Seller will, and will cause each of
its Subsidiaries to, keep books of record and account in which full, true and
correct entries are made of all of its and their respective dealings, business
and affairs, in accordance with generally accepted accounting principles. Seller
will employ certified public accountants selected by the Board who are
"independent" within the meaning of the accounting regulations of the
Commission, and have annual audits made by such independent public accountants
in the course of which such accountants shall make such examinations, in
accordance with generally accepted auditing standards, as will enable them to
give such reports or opinions with respect to the financial statements of Seller
and its Subsidiaries as will satisfy the requirements of the Commission in
effect at such time with respect to certificates and opinions of accountants.
9.3. Furnishing of Financial Statements and Information. Seller will
deliver to Buyer:
(a) as soon as practicable, but in any event within 45 days after the
close of each quarterly period, unaudited consolidated balance sheets of Seller
and its Subsidiaries as of the end of such period, together with the related
consolidated statements of operations and cash flow for such period, setting
forth the budgeted figures for such period prepared and submitted in connection
with Seller's annual business plan and in comparative form figures for the
corresponding quarterly period of the previous fiscal year, all in reasonable
detail and certified by an authorized accounting officer of Seller, subject to
year-end adjustments;
(b) as soon as practicable, but in any event within 90 days after the
end of each fiscal year, a consolidated balance sheet of Seller and its
Subsidiaries, as of the end of such fiscal year, together with the related
consolidated statements of operations, shareholders' equity and cash flow for
such fiscal year, setting forth in comparative form figures for the previous
fiscal year, all in reasonable detail and duly certified by Seller's independent
public accountants (except for the fiscal year ended 1997, for which certified
materials will be supplied as soon as practicable following Closing), which
accountants shall have given Seller an opinion, unqualified as to the scope of
the audit, regarding such statements;
(c) with reasonable promptness, such other financial data relating to
the business, affairs and financial condition of Seller and any Subsidiaries as
is available to Seller and as from time to time Buyer may reasonably request;
and
(d) at least 20 days prior to the earlier of (i) the execution of any
agreement relating to any merger or consolidation of Seller or any of its
Subsidiaries with another corporation, or a plan of exchange involving the
outstanding capital stock of Seller or any of its Subsidiaries, or the sale,
transfer or other disposition of all or substantially all of the property,
assets or business of Seller or any of its Subsidiaries to another corporation,
or (ii) the holding of any meeting of the shareholders of Seller for the purpose
of approving such action, written notice of the terms and conditions of such
proposed merger, consolidation, plan of exchange, sale, transfer or other
disposition.
9.4. Indemnification Rights. For a period of not less than six (6)
years from the Closing Date, unless otherwise required by law, Seller will
maintain provisions in its articles of incorporation and by-laws with respect to
indemnification of directors and officers, whether then current or former, that
are no less favorable than as currently set forth in its articles of
incorporation and by-laws. Further, for a period of not less than six (6) years
from the Closing Date, unless otherwise required by law, Seller will continue to
provide indemnification of its directors and officers, whether then current or
former, to the fullest extent permissible under Texas law.
10. Buyer's Affirmative Covenants. Upon execution of this Agreement,
Buyer agrees as follows:
10.1. Special Shareholders' Meeting. In connection with Special
Shareholders' Meeting to be called pursuant to Section 7.6 herein, Buyer agrees
to assist Seller as reasonably requested and agreed in preparing materials and
soliciting proxies in connection with obtaining approval of its shareholders to
increase its authorization to issue common stock in connection with the
transaction contemplated by this Agreement. As part of Buyer's obligations
hereunder, Buyer agrees reimburse Seller for expenses incurred in preparing
materials and soliciting proxies, not in excess of the amounts set forth in
Schedule 10.1, and further to furnish Seller, within reasonably sufficient time
to be reviewed and included in the materials to be mailed to shareholders in
connection with the Special Shareholders' Meeting, the names of Buyer's nominees
for election to the Board, together with information with respect to each
nominee equivalent to the information required to be disclosed to stockholders
with respect to director nominees pursuant to Regulation 14A of the Securities
and Exchange Act and such other similar information that Seller may thereafter
reasonably request. It is understood that Seller may refuse to cause the
nomination and election as a director of Seller of any nominee proposed by Buyer
if (i) the information described above is not timely furnished by Buyer or (ii)
if, having been furnished, it is the reasonable judgment of Seller and its
counsel that the election of such nominee would not be in the best interests of
Seller or might tend to subject Seller to liability therefor. The foregoing
notwithstanding, Buyer and Seller agree to cooperate and use their mutual best
efforts for the purpose of preparing for and conducting the Special
Shareholders' Meeting as promptly as possible following the Execution Date.
10.2. Orders for Product. As soon as practicable following the Closing
Date, but not later than eight (8) months from the Execution Date, Buyer will
take all reasonable efforts to cause the placement of ten (10) product orders,
in the aggregate including any orders currently under discussion, from Buyer's
affiliate in Japan over a period of thirty-six (36) months from the placement of
the first order.
10.3. Additional Equity. As soon as practicable following the Closing
Date, Buyer will use its best efforts to arrange for additional third party
equity financing for Seller, to be contributed to Seller over a period of no
greater than eighteen (18) months from the Closing Date, and in an aggregate
amount not less than Eight Million U.S. Dollars ($8,000,000) ("Equity
Financing"). The parties specifically acknowledge and anticipate that this
Equity Financing will involve and/or cause a substantial dilution of existing
shareholders, including but not limited to Buyer.
11. Negative Covenants. Seller will not, without the prior approval of
a majority of all of the members of the Board of Directors: (a) guarantee,
endorse or otherwise be or become contingently liable, or permit any Subsidiary
to guarantee, endorse or otherwise become contingently liable, in connection
with the obligations, securities or dividends of any person, firm, association
or corporation, other than Seller or any of its Subsidiaries, except that Seller
and any Subsidiary may endorse negotiable instruments for collection in the
ordinary course of business; or (b) make or permit any Subsidiary to make loans
or advances to any person (including without limitation to any officer, director
or shareholder of Seller or any Subsidiary), firm, association or corporation,
except loans and advances to Seller and its wholly-owned Subsidiaries and
advances to suppliers and employees made in the ordinary course of business; or
(c) purchase or invest, or permit any Subsidiary to purchase or invest, in the
stock or obligations of any other person, firm or corporation, other than a
wholly-owned Subsidiary; or (d) pay, or permit any Subsidiary to pay,
compensation, whether by way of salaries, bonuses, participations in pension or
profit sharing plans, fees under management contracts or for professional
services or fringe benefits to any officer in excess of amounts fixed by the
Board of Directors prior to any payment to such officer.
12. Registration of Stock. Subject to the provisions of the several
registration rights agreements and /or other agreements containing registration
rights provisions, to which Seller is a party, all as disclosed and described on
Schedule 12 hereto, Seller agrees as follows:
12.1. Rights to Registration. (a) If, at any time during the period
commencing on the effective date of this Agreement and ending ten (10) years
thereafter, Seller shall determine to register under the Securities Act of 1933,
as amended, any shares of Stock to be offered for cash by it or others, pursuant
to a registration statement on Form S-1 (or its equivalent), Seller will (i)
promptly give written notice to Buyer of its intention to file such registration
statement and (ii) at Seller's expense (which shall include, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel and independent accountants for Seller, and fees and expenses incident
to compliance with state securities law, but shall not include fees and
disbursements of counsel for Buyer) include among the securities covered by the
registration statement such portions of the Shares then held by Buyer as shall
be specified in a written request to Seller within thirty (30) days after the
date on which Seller gave the notice described in (a)(i) above. (b) Upon receipt
of such written request and of the shares of Stock specified in the request (any
shareholder requesting registration being individually called a "Selling
Shareholder"), Seller shall: (i) use its reasonable best efforts to effect the
registration, qualification or compliance of the Shares under the Securities Act
and under any other applicable federal law and any applicable securities or blue
sky laws of jurisdictions within the United States; (ii) furnish each Selling
Shareholder such number of copies of the prospectus contained in the
registration statement filed under the Securities Act (including preliminary
prospectus) in conformity with the requirements of the Securities Act, and such
other documents as the Selling Shareholder may reasonably request in order to
facilitate the disposition of the Stock covered by the registration statement;
and (iii) notify each Selling Shareholders, at any time when a prospectus
relating to the Stock covered by such registration statement is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus forming a part of such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and at the request of the Selling Shareholders prepare
and furnish to the Selling Shareholders any reasonable number of copies of any
supplement to or amendment of such prospectus as may be necessary so that, as
thereafter delivered to purchasers of the Stock, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
12.2. Registration of Underwritten Offering. If the offering of
securities to be registered by Seller is underwritten, each Selling shareholder
shall sell the Stock to or through the underwriter(s) of the securities being
registered for the account of Seller or others upon the same terms applicable to
Seller or others, and if the managing underwriter(s) reasonably determine that
all or any portion of the shares of Stock held by the Selling Shareholders
should not be included in the registration statement, then notwithstanding
anything to the contrary in this Section, the determination of such
underwriter(s) shall be conclusive; provided however that if such underwriter(s)
determine that some but not all of the Stock of the Selling Shareholders shall
be included in the registration statement, the number of shares of Stock owned
by each Selling Shareholder to be included in the registration statement will be
proportionately reduced in accordance with the respective written requests given
as provided above.
12.3. Indemnification. In the event that Shares purchased pursuant to
this Agreement are included in a registration statement under this Section 11,
Seller will indemnify and hold harmless each Selling Shareholder and each other
person, if any, who controls such Selling shareholder within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Selling Shareholder or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of are based
upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement pursuant
to which the Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arise out of or are based upon the
failure by Seller to file any amendment or supplement thereto that was required
to be filed under the Securities Act, and will reimburse such Selling
Shareholder and each such controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action. Notwithstanding the foregoing,
Seller will not be liable in any such case to the extent that any such loss,
claim, damage, or liability arises out of or is based upon an untrue statement
or omission made in such registration statement, preliminary prospectus, final
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to Seller through an instrument duly executed by
or on behalf of any Selling Shareholder specifically for use in the preparation
of such registration statement, preliminary prospectus, final prospectus, or
amendment or supplement.
It shall be a condition precedent to the obligation of Seller to take
any action pursuant to this Section that seller shall have received an
undertaking satisfactory to it from each Selling Shareholder to indemnify and
hold harmless Seller (in the same manner and to the same extent as set forth in
this Section), each director of Seller, each officer who shall sign such
registration statement, and any persons who control Seller within the meaning of
the Securities Act, with respect to any statement or omission from such
registration statement, preliminary prospectus, or any final prospectus
contained therein, or any amendment or supplement thereto, if such statement or
omission was made in reliance upon and in conformity with written information
furnished to Seller through an instrument duly executed by the indemnifying
party specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, or amendment or supplement.
Promptly following receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to above in this Section
11.3, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action. In case any such action is brought against an
indemnified party, the indemnifying party will be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party for any
legal or other expenses subsequently incurred by the latter in connection with
the defense thereof.
12.4. Binding provisions. The provisions of this Section 11 shall be
binding on the successors of Seller. No Shareholder may assign the provisions of
this Section 11 or all or any part of its or their rights or obligations
hereunder, except that in the event of a merger or consolidate in which the
Seller is not the survivor, the Seller shall assign and transfer, and successor
shall assume, the provisions of this Section 11.
12.5. Conflicts. To the extent that Seller's compliance with the
obligations set forth in Sections 12.1 through 12.4 above would conflict with or
otherwise cause a breach of or default under any of its existing obligations
pursuant to the agreements set forth on Schedule 12 attached hereto, Seller's
failure to comply with those obligations shall not be deemed a breach of this
Agreement.
13. Remedies Cumulative, and not Waived. (a) No right, power or remedy
conferred upon any party shall be exclusive, and each such right, power or
remedy shall be cumulative and in addition to every other right, power or
remedy, whether conferred hereby or by any such security or now or hereafter
available at law or in equity or by statute or otherwise. (b) No course of
dealing between the parties or the holder of any Shares purchased pursuant to
this Agreement, and no delay in exercising any right, power or remedy conferred
hereby or by any such security or now or hereafter existing at law or in equity
or by statute or otherwise, shall operate as a waiver of or otherwise prejudice
any such right, power or remedy; provided, however, that this Section 13 shall
not be construed or applied so as to negate the provisions and intent of any
statute which is otherwise applicable.
14. Changes. Waivers. etc. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
15. Notices. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be delivered, or
mailed first-class postage prepaid, registered or certified mail, or via
overnight delivery with by a service providing evidence of receipt to the
addresses below:
If to Buyer: Imatron Inc.
000 Xxxxxx Xxxxx Xxxx.
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attn: Mr. S. Xxxxx Xxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to: Xxxxx X. Xxxxx, Esq.
Xxxxxxxx & Xxxxxx, P.C.
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Seller: Positron Corporation
0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx & Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and such notices and other communications shall for all purposes of this
Agreement be treated as being effective or having been given if delivered
personally, or, if sent by first class mail, three days after posting, or if
sent via overnight delivery, when received as evidenced by an appropriate
receipt.
16. Survival of Representations and Warranties, etc. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement, any investigation at any time made by Buyer or on
its behalf, and the sale and purchase of the Common Shares. All statements
contained in any certificate, instrument or other writing delivered by or on
behalf of Seller pursuant hereto or in connection with or contemplation of the
transactions herein contemplated (other than legal opinions) shall constitute
representations and warranties by Seller hereunder, and not by the individual
officer who signed the certificate, instrument or writing by or on behalf of
Seller.
17. Parties in Interest. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, whether so expressed or
not, and, in particular, shall inure to the benefit of and be enforceable by the
holder or holders at the time of any of the Common Shares. The former, current
and hereafter appointed officers and directors referenced in Section 9.4 above
are intended and deemed to be third party beneficiaries of Section 9.4, and are
entitled to enforce its provisions.
18. Headings. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
19. Choice of Law. It is the intention of the parties that the laws of
California shall govern the validity of this Agreement, the construction of its
terms and the interpretation of the rights and duties of the parties.
20. Counterparts. This Agreement may be executed concurrently in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. Severability. In the event that any part of this Agreement is
determined by a court of competent jurisdiction to be unenforceable, the balance
of the Agreement shall remain in full force and effect.
IN WITNESS WHEROF, the parties execute this Agreement as of the date
first written above.
SELLER: BUYER:
POSITRON CORPORATION IMATRON INC.
By: /s/ Xxxx X. Xxxx By: /s/ S. Xxxxx Xxxxx
Its: Chief Executive Officer Its: President/CEO
ATTEST: ATTEST:
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx
Its: Executive Vice President Its: CFO
